Charities (Protection and Social Investment) Bill [HL]

Lord Watson of Invergowrie Excerpts

Monday 29th June 2015 Grand Committee

[Lord Hope of Craighead (CB)]

My Lords, Amendment 6 is the sole amendment dealing with Clause 8 of the Bill, which is a comparatively short clause on the “Power to direct property to be applied to another charity”. As it appears in the Bill, Clause 8 makes one amendment to Section 85 of the Charities Act 2011, which is dealing with a different matter from the one that is of concern to me. Amendment 6 seeks to insert two words into Section 85(1)(a) of the 2011 Act so that the phrase,

“persons in possession or control of any property … unwilling to apply it … for the purposes of the charity”,

would also deal with those who say that they are willing to do so but are unable to do so.

The draft Bill, as it appeared before us in the Joint Committee, included the words that I am seeking to insert into Section 85. The description of the draft Bill can be seen in paragraph 141, read with paragraph 142, of the Joint Committee’s report. As paragraph 141 records,

“Clause 7”—

as it was in the draft Bill—

“would amend the 2011 Act to allow the Commission to direct the application of charity property in the event that the person is either ‘unwilling’ or ‘unable’ to do so, rather than just ‘unwilling’ as is currently the case. The explanatory notes to the Bill refer to ‘several cases in which financial institutions holding charity property were contractually unable to transfer it to secure its proper charitable application but would have been willing to do so.’”

In paragraph 142, we go on to say that,

“The evidence received by the Committee was supportive of this provision”,

and the footnote refers to Professor Gareth Morgan, the Charity Commission for Northern Ireland and the Joseph Rowntree Charitable Trust. Paragraph 142 continues:

“The Charity Law Association”—

which had made a number of very helpful comments on the wording of the draft Bill—

“did not oppose this change, but questioned whether the meaning of the term ‘unable’ was sufficiently clear and whether banks in such situations were really ‘unable’ to transfer charity money or just ‘unwilling’ to breach a contract to do so”.

Since the current Bill was published, I have had a meeting with William Shawcross of the Charity Commission, who has explained to me that he would much prefer that the words “unwilling or unable” were put in—in other words, that the words “or unable” were restored, as my amendment seeks. He explained that, from time to time, he encounters cases of this kind where a direction is proposed and the response is, “Yes, indeed, we are willing to do this, but for a variety of reasons we are simply not able to do so”. As he put it to me, it would be possible by sleight of hand to fudge the thing a little bit, as it were, and treat unwillingness on such a ground as being within the scope of the section, but he would rather that the section was really upfront about the fact that both situations that he encounters in practice were actually dealt with in the wording of Section 85, so that unwillingness, which certainly occurs and is a source of concern, was dealt with but inability—where the persons involved are perfectly willing to comply with the direction but for various reasons say that they cannot properly do so—was covered as well.

This is a very short point. I am a little puzzled as to why the draft Bill which survived scrutiny by the Joint Committee should have been altered in this way. I hope that the Minister will pay attention to the wishes of the Charity Commission, which would find it useful if the amendment were accepted. I beg to move.

[Lord Watson of Invergowrie (Lab)]

My Lords, as one who was a member of the Joint Committee under the excellent chairmanship of the noble and learned Lord, Lord Hope, I share his puzzlement as to why this change has been made to the draft Bill. I have no wish to repeat the words of the noble and learned Lord, but those of us in opposition do not fully understand why such a change should have been made and we invite the Minister to explain that if he can, and to say why, after the Joint Committee recommended acceptance of the draft proposal, and given that, as we have heard, the Charity Commission wants this change, the original wording of the draft Bill should not be reinstated. There is little more to say than that. I look forward to the Minister’s response.

[The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)]

My Lords, I, too, will keep my remarks relatively brief, by reason of the conclusion that I have come to as a result of what the noble and learned Lord and the noble Lord have said.

The provision corresponding to Clause 8 in the Bill made reference to “unable” in the manner proposed by this amendment. The Charity Commission asked for the change following several cases where financial institutions holding charity property were contractually unable to transfer it to secure its proper charitable application but would have been willing to do so. As the noble and learned Lord said, the Joint Committee which considered the draft Bill supported the provision.

However, as is noted in the report, the Charity Law Association, while it did not oppose the change, questioned whether the meaning of the word “unable” was sufficiently clear and whether banks in such situations were really unable to transfer charity property, or simply unable to breach a contract to do so. Therefore the Joint Committee recommended that the Government consider the inclusion of some form of statutory protection for a financial institution in cases where compliance with a Charity Commission direction in these circumstances might constitute a breach of its contract with a charity. The Government therefore followed this recommendation and amended Clause 8 to provide for such statutory protection. Since the clause was aimed at dealing with financial institutions which are contractually unable to transfer property, this statutory protection was considered sufficient and the reference to “unable” was omitted.

The amendment tabled by the noble and learned Lord, Lord Hope, proposes to reinstate the reference to “unable”, as we have heard, and further examples have been provided as to when this would be needed beyond the contractual liabilities of banks. I also note what the noble and learned Lord said about his conversations with the Charity Commission. In light of this, I am happy to give further consideration to the amendment and to return to this on Report.

--- Later in debate ---

[Lord Watson of Invergowrie]

My Lords, I argue that Clause 9 should not stand part of the Bill. I do so not because we do not wish this clause to stand part of the Bill but because we want to raise issues that have not had an airing through another amendment, and we have particular concerns over issues surrounding charities working in areas of conflict.

The Minister will remember that I raised that issue at Second Reading when I asked if he would speak with his ministerial colleague at the Home Office. I hope that he has now done so and will be able to make noble Lords aware of what that discussion produced. Again, I draw attention to the difficulties posed by current counterterrorism legislation to the protection of charities working overseas to deliver humanitarian aid. I accept that changes to the various laws that cover counterterrorism are not capable of being dealt with within the confines of the Bill. However, concerns were raised with the pre-legislative Joint Committee on these matters by several of those who gave evidence, in particular two umbrella organisations that cover NGOs that work abroad: Bond and the Muslim Charities Forum. They would welcome greater clarity from the Government, which would be helpful for all of us.

In response to the Joint Committee’s report the previous Government stated:

“Terrorism legislation is in no way designed to prevent the legitimate humanitarian work of charities, but it needs to be widely drawn to ensure that it captures the ever diversifying nature of the terrorist threat”.

That is understandable, not least in light of the unspeakably appalling events in Tunisia, Kuwait and France three days ago. However, in his evidence, the Government’s Independent Reviewer of Terrorism Legislation, David Anderson QC, told the Joint Committee that the use or suspected use of property for the purposes of terrorism was “monstrously” broadly defined in legislation. Coming from that source, such a comment carries significant weight, and you do not leave yourself open to charges of being weak or soft on terrorism—which we in the Labour Party most certainly are not—by seeking comment on a matter previously highlighted by the Government’s own Independent Reviewer of Terrorism Legislation.

Indeed, Mr Anderson pointed the Joint Committee in the direction of Australia and New Zealand, where specific exceptions exist in terrorism law to cover charities involved in the delivery of humanitarian aid. I am not comparing the UK to either of those countries with regard either to their size or the level of terrorist threat they face. However, given the similarities of the legal systems of all three countries, the possibility that such legislation might prove of value means that it should at least be examined. Again, I mention that the man who drew it to the attention of the Joint Committee can hardly be characterised as being other than committed to ensuring that the UK’s counterterrorism measures are as tight and effective as they possibly can be.

We acknowledge that the Charity Commission has been proactive on this subject and has meet with some of those NGOs faced with the kind of difficult circumstances to which I have referred, and the commission issues alerts and seeks to make charities as aware as possible of the risks involved. However, the current counterterrorism legislation, despite the fact that no prosecutions have been brought against UK NGOs that operate in conflict zones, is having a chilling effect on them, and undoubtedly makes it more difficult for those NGOs to deliver humanitarian aid.

The pre-legislative scrutiny Joint Committee highlighted this matter to the previous Government, who said in their response that they would,

“draw the Committee’s recommendation to publish guidance relating to prosecutions under counter-terrorism legislation … to the attention of the Director of Public Prosecutions”.

Given that three months have now elapsed and that—I think I can say this to the Minister—a clear line exists between the previous Government and the current one, will the Minister tell the Committee whether that has been done and, if so, what conclusions have emerged?

Finally, we believe that the commission and those charities which presently fear to tread in certain situations would welcome a form of words which went some way to providing more clarity—perhaps even legal certainty —on this important matter.

[Baroness Warwick of Undercliffe (Lab)]

My Lords, I support the probing questions of my noble friend Lord Watson of Invergowrie. At several stages in our pre-legislative scrutiny of the Bill, we became anxious about the breadth and vagueness of the powers which it bestows on the Charity Commission. These concerns were reinforced by a letter from the chairman of the Joint Committee on Human Rights, Dr Hywel Francis MP, in which he said:

“In the absence of further definition in the Bill itself, or other guidance, such broad and vague language significantly increases the power of the Commission and provides insufficient certainty to both individual trustees and charities about the possible consequences of their conduct”.

At each stage, when we had these concerns, we looked carefully at the evidence and concluded, as noble Lords will see from the report, that the powers were indeed justified in that they were likely to help to increase public trust and confidence in charities.

However, when it came to the inclusion of terrorism offences, as my noble friend has indicated, we received evidence that disturbed us. As noble Lords will know from our report, a number of witnesses expressed concerns over the difficulties presented by terrorism legislation in relation to the operational requirements of NGOs in challenging circumstances overseas. They were particularly concerned about charities operating in dangerous parts of the world for humanitarian purposes. My noble friend referred to the chairman of the Muslim Charities Forum, Dr Hany El-Banna, who told us that he thought counterterrorism legislation was,

“preventing us from having access to the neediest people”.

David Anderson QC, the Government’s Independent Reviewer of Terrorism Legislation, who has already been referred to, said concepts such as the provision of “indirect support” to terrorist organisations had,

“an impact on humanitarian charities, particularly when working abroad and when working in areas that are under the de facto control of a proscribed or designated group”.

He went on to say that charities operating in these areas ran the risk of falling foul of terrorism law by, for example, delivering relief to a general population which might include individuals or groups designated as terrorists. He suggested that an increased risk could deter charities and their trustees from delivering humanitarian support. Bond, the umbrella group, went on to suggest, in our words, that,

“the withdrawal of banking services exposed donor assets to greater risk because international NGOs had no option other than to use less secure money service bureaux or to carry sums of cash across borders”.

Nothing in what I have said undermines the need to deal with terrorism offences and to address legitimate concerns about the abuse of charitable funds in connection with terrorism. It does, however, raise questions about the uncertainty surrounding the application of terrorism legislation when it comes to charities operating in dangerous circumstances overseas. The pre-legislative scrutiny committee was offered the examples of Australia and New Zealand as places where Governments had addressed this issue and where specific exceptions in law existed to meet this point. We thought that this was worth pursuing, but when we raised it with the Minister for Civil Society, he said it fell outside his remit and was essentially a matter for the Home Office. He went on to say that it could be,

“chasing a problem that does not exist”,

since,

“no one has been prosecuted”.

I do not think that that is good enough. Clearly these charities are expressing real anxieties about the risks they might face and about the chilling effect of this legislation. The difficulties facing these charities are already enormous in Afghanistan, Iraq, Chechnya and Somalia, among other places. If it is possible to provide them with greater certainty in pursuing their important work and overcome this worrying and chilling effect, then we should try to do that.

Like my noble friend, I was disappointed with the Government’s response. The Government recognise that there are concerns, but points only to the problems of creating loopholes without even addressing the suggestion that they might look at the examples of Australia and New Zealand to see whether and how those countries have overcome this danger. I ask the Minister to think again and at least to consider whether other countries can provide some inspiration about whether there are ways to provide greater legal certainty.

Finally, the Government have said they will draw to the attention of the Director of Public Prosecutions our recommendation to publish guidance. I hope they will agree to do rather more than that and to put their weight behind the need for guidance to address the current uncertainty, which was revealed in our evidence and which the Government acknowledge.